‘Paradise Papers’: Queen’s cash going offshore legitimate, but is it moral?
Calls for a clean-up of Britain’s tax system came to the fore again, with some despairing that questions raised by the previous Panama Papers scandal had not led to action.world Updated: Nov 06, 2017 20:27 IST
Questions were raised after the Paradise Papers revealed that millions of pounds of Queen Elizabeth’s private money was invested offshore, with opposition Labour leaders questioning if the investments were moral, even if legitimate.
Calls for a clean-up of the tax system came to the fore again, with some despairing that questions raised by the previous Panama Papers scandal had not led to action. Several tax havens are British Overseas Territories or Crown Dependencies.
The Queen’s funds were invested offshore by the Duchy of Lancaster, a private estate intended to generate a return for the reigning monarch. It was set up in 1399 and manages land and investments held in trust for the Queen, who also holds the title of the Duke of Lancaster.
There was no official word from Buckingham Palace, but the Duchy of Lancaster said all investments were legitimate, and that the Queen pays the equivalent of income tax on her private income.
The scale of the latest revelations led Labour Party leaders to claim Britain need not have gone through seven years of austerity if the super-rich had paid their taxes in the country, instead of parking their wealth offshore.
The Paradise Papers mostly comprise documents from a law firm in Bermuda, whose premier, David Burt, tossed the ball in London’s court, saying the British Overseas Territory had a “robust regulatory regime”. It has had the same tax system since 1898, he said, and claimed Britain’s tax law allowed the use of offshore tax havens.
Burt said: “Bermuda cannot make a change to its laws to address the challenge of what you are looking at, what you are discussing is the United Kingdom law. There is nothing that has been found that is illegal or contrary to law.”
Shadow chancellor John McDonnell said he was “pretty shocked” at the revelations but not surprised, and called for a full public inquiry, much greater scrutiny, and a full register of companies and trusts investing offshore. “I actually think there is an issue of morality here,” he said.
Anti-monarchy campaign group Republic called on the Queen to be honest with the public over her financial affairs, and alleged that the royals’ lack of transparency created a real risk of conflict of interest and abuse of power.
Graham Smith of Republic said: “The Queen is responsible for her investments, she should have instructed her advisers to ensure her money was invested ethically, and that there was no tax dodging involved.
“The Queen’s personal wealth and investments mean she has a direct interest in government decisions about tax. Yet we have no way of knowing if undue influence has been used by the royal household to protect these investments.
“The Queen now needs to come clean, to set the highest standards of transparency and probity in her financial affairs. We need to know where the Queen is making her money and what taxes she is paying. We also need to know if there has been any lobbying of the government regarding tax haven reform.”
According to Duncan Hames of Transparency International, the bigger picture was that “a corrupt global elite is gaming the international financial system to hide their illicit wealth”. He said, “This offshore secrecy industry allows corrupt officials to live a life of luxury with cash that has often been stolen from the very poorest populations in the world.”